April Trading Review: Please give DeFi some more time

After more than a month of ups and downs, looking back, there are only two main trends: APE and GMT.

This article is authorized for reprint from 0xSoros, original article here.

Let's review our positions first. My position in LUNA is near the cost line, while Astro has doubled. The overall involvement in the LUNA ecosystem came too late, not even a sip of the soup.

DFK made a big mistake, team members minted fake coins during the project's cold launch, and all the addresses were fake. I thought the Subnet on Avalanche was a new beginning, but it turned out to be a missed opportunity. I have already written off my DFK position, but fortunately, the off-market chips I bought initially cost $2, and even if it goes to zero, it is within the acceptable range. I made a roller coaster ride with the floating profit. Willing to bet and lose.

At the same time, GameFi collectively went cold, and related tokens plummeted. AXS unknowingly dropped from $150 to $50, and even pets plummeted by tens of times. In addition to the recent $600 million hack, the leaders in the NFT circle, such as Little Mao, believe that AXS has completed its historical mission. This is akin to sentencing AXS to death.

As one side sings, the other enters the stage. Move To Earn is rising. GMT has yielded 40 times in just one month. Hot money is still concentrated on projects that have gone mainstream. Some copycats of running shoes have also emerged, and Coingecko has also opened a column for Move To Earn. I wonder if it will trigger a wave of copycat trends like GameFi did in its early days.

One thing that GMT makes people rethink is the bias against domestic projects, or more accurately, Chinese teams. The reason for such bias is that in the development of the industry over the past seven or eight years, there have been too many projects led by Chinese teams that have left investors high and dry. But GMT is precisely a project initiated by two Chinese entrepreneurs. One of them is a friend I met in 2019, and we just passed by each other like that with wealth.

For Web3 projects, Chinese entrepreneurs are actually the most advantaged. Whether in terms of product development progress, community activities, marketing, project cold launches, or the founders' diligence. Why can't Chinese projects succeed? If we continue to maintain such prejudices, I think we will miss out on more opportunities.

The stuff of Crypto Native, after ten years of development in the cryptocurrency circle, the routines have been completely figured out. However, many people have not yet understood NFT/GameFi/Web3. There are profits to be made in the areas that are not yet understood. At the same time, traditional tokens, with overly high valuations when listed, potential selling pressure, and a concentration of private placements, are the reasons why token prices have been slow to rise.

NFT has basically eliminated a part of private placements and, like DeFi in its early days, belongs to Fair To Launch. Whether you are a retail investor or a whale, everyone has to compete fairly and buy in the secondary market. Perhaps we can say that when something evolves from infancy to maturity, it will inevitably transition from a fair distribution stage to multiple rounds of traditional private placements.

To say something untimely, will Move To Earn in the future end up like GameFi, which is currently in a mess?

There is still a difference in judgment between NFT native players and DeFi old players. Taking BAYC as an example, NFT players may feel that the monkey floor is just the beginning, another attempt by Yuga Labs to expand its dominance in the NFT field. At the same time, the increase in the valuation of the BAYC ecosystem further opens up the upward potential of NFT. DeFi old players are more likely to think that the monkey floor is the starting point of the collapse of the BAYC ecosystem.

The current generation of DeFi players is struggling to keep up with the pace of the NFT era and has a certain bias in judging many things. Their reliance on the path of DeFi leads them to lean towards buying tokens and resist NFT/images instinctively. The voice in their hearts says, "I really don't want to spend Ethereum and US dollars on these images." NFT players, on the other hand, treat ETH as play money.

Some well-known KOLs in the industry who rely on DeFi rarely mention the NFT field in their analytical articles. NFT itself is their weak point, and they rarely touch it. When asked, their answer is: Because they know very little about it, they don't know what to say, and they dare not speak randomly.

We can only say that the times have really changed. The old is replaced by the new.

Many NFT players look down on DeFi players, which is understandable. Watching the wave of people who made a fortune back then struggle to make money now, while they are at the peak of the wave, it is inevitable to feel a bit proud. However, I want to say that many DeFi players are working hard to catch up, just a bit slow, and cognitive shifts often take 1-2 years. Give them some more time.

Do we not have money in hand? Not really. After a bull market, everyone has made a certain amount of money. It's just that the market lacks suitable targets, and everyone is very cautious about making a move.

DeFi is completely unprofitable. Quoting Teacher Lu, Uniswap will continue to erode the market share of DEX, but that does not mean that the UNI token will rise in price. Retail investors, whales, institutions, practitioners, everyone has understood DeFi. DeFi has completely become a tool for mining and low-risk, low-return financial management.

Although I don't have a clear definition of Web3, Twitter is a very Web3 product in my mind. On Twitter, you can hear all kinds of voices. A hundred schools of thought contend, teaching without discrimination. Musk's acquisition of Twitter is of great significance.

In the future, I will focus my positions and attention on NFT and Web3, breaking away from the reliance on buying tokens. As long as it can make money, there is no difference between buying tokens or images.

Many players may feel frustrated for not catching the several big market waves in the past one or two years. As an experienced person, I think there is no need to be overly concerned. After all, we also suffered losses for three or four years before seizing the opportunity to turn things around one day.